Roll-Your Own vs. Pipe Tobacco

After the SCHIP Tax was passed back in April 2009, RYO taxes jumped 2000%, resulting in RYO manufacturers rebranding their product as pipe tobacco. Some officials were shocked by this and the usual suspects blamed the tobacco execs for finding this 'loophole'. Some senators jumped on this and threatend these manufacturers to stop this practice or they would.

Let me get this straight. The mega cigarette giants supported this tax and somehow there are these evil RYO tobacco 'execs' to blame for this so-called tax evasion. This is a matter of a legal industry trying to stay alive after an attempt to be taxed out of existence. Most of these RYO manufacturers are small businesses, especially when compared to the big boys on the block. Government has an unending hunger for your tax dollars and RYO was cutting into the big cigarette companies profit margins and in turn 'denying' both local and federal government more of your money.

I'll admit, at first I was not happy that the RYO companies had put pipe tobacco in the crosshairs. But that would be hypocritical. Now the fight is on to provide a better definition of what pipe tobacco is and what RYO is. Currently the IRS tax code provides these definitions:

TITLE 26 - INTERNAL REVENUE CODE
Sec. 5702. Definitions

(n) Pipe tobacco: The term ''pipe tobacco'' means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe.

(o) Roll-your-own tobacco: The term ''roll-your-own tobacco'' means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes.

In a normal world with fair taxation this would suffice, but in a world where tax dollar hunger is bottomless, these definitions will be expanded by pages.

Every pipe smoker knows that when you put RYO tobacco - or tobacco that is cut to be smoked in a cigarette - into a pipe it will not taste very good and burn hot, burning your tongue in the process.  Try and put pipe tobacco in cigarette form and it'll be too moist and not taste like a cigarette.  Problem is that members of congress have no clue about this unless they are pipe smokers.  Would the pipe smokers in congress please stand up and provide some sanity before the pipe tobacco tax is raised by 2000% and destroys yet more small businesses.

Cigars have been taxed as well but are exempt from the PACT ACT.  Why?  If the government is going after all forms of tobacco, why not cigars?  You can take a cigar, cut it up and put in a pipe and maybe even roll the tobacco into a cigarette as well.  The answer is simple...they are exempt FOR NOW.  Is it any wonder that tobacco tax revenues are continuing to drop?  Watch out grow-your own industry, you will be in the crosshairs as well.

The irony in all this is as tobacco is slowly making its way toward full prohibition, marijuana is moving toward legalization. 

Now imagine a future where you can go to jail for growing your own tobacco and your neighbor could be watching you hauled away while he puffs on his joint and all the authorities do is wave hello to him.  Some crazy stuff. 

Related articles:

Tobacco execs quickly find tax loophole
Tobacco Retailers Challenge News Reports on Roll-Your-Own, Pipe Tobaccos
Beware the Adverse Effects of Cigarette Taxes on Kids